Canada’s annual inflation rate rose to 2% in October, up from 1.6% in September, as the decline in gasoline prices moderated, Statistics Canada reported on Tuesday. The increase brings inflation back to the Bank of Canada’s target rate, potentially influencing future monetary policy decisions.
On a monthly basis, the CPI increased 0.4% in October, reversing a 0.4% decline in September. Seasonally adjusted, the monthly increase was 0.3%.
The all-items Consumer Price Index excluding gasoline remained steady at 2.2% for the third consecutive month. Gasoline prices fell 4% year-over-year in October, compared to a 10.7% drop in September, contributing significantly to the overall inflation uptick.
Shelter costs continued to moderate, with prices rising 4.8% year-over-year in October, down from 5% in September. Mortgage interest costs, while still elevated, showed signs of easing, increasing 14.7% compared to 16.7% the previous month. Rent prices also decelerated, rising 7.3% annually, down from 8.2% in September.
Food prices from stores accelerated, increasing 2.7% year-over-year in October, up from 2.4% in September. This marks the third consecutive month that grocery price growth has outpaced headline inflation.
Property taxes saw a significant jump, rising 6% year-over-year, the highest increase since 1992. This annual adjustment in October affected all provinces, with Newfoundland and Labrador and British Columbia experiencing the largest increases.
The inflation data comes as the Bank of Canada weighs its next policy move. While the return to the 2% target may influence decisions, the central bank will also consider upcoming GDP and employment data before its December 11 announcement.
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